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This content was produced in Russia where the law
restricts
coverage of Russian military operations in Ukraine
(Adds more details, background)
MOSCOW, Feb 20 (Reuters) - Russia's economy contracted
2.1% last year, the federal statistics service said on Monday,
compared with a 5.6% year-on-year rise in 2021, hurt by the
fallout from Moscow's decision to send tens of thousands of
troops into Ukraine last February.
Rosstat's first gross domestic product (GDP) estimate for 2022 was a marked improvement on forecasts made soon after the conflict began. The economy ministry at one point predicted that Russia's economy would shrink more than 12% last year, exceeding the falls in output seen after the Soviet Union collapsed and during the 1998 financial crisis. Before the conflict in Ukraine began, the Russian government had expected GDP growth of 3% in 2022.
Manufacturing industries and wholesale and retail trade were among the sectors that declined in 2022, while agriculture, hospitality, construction and mining all registered growth.
Public administration and "military security" gained
4.1% in 2022, the statistics agency said, adding to a 3.3% rise
in 2021. President Vladimir Putin in January paid tribute to the
defence sector for supporting Russia's economy.
Increased military spending is smoothing out a drop in
Russia's industrial production, analysts say.
Net exports increased to 12.8% from 9.3%, "due to the
prices of exported fuel and energy products being significantly
above imports".
Russia's current account surplus hit a record high in 2022, as a fall in imports and robust oil and gas exports kept foreign money flowing in despite Western efforts to isolate the Russian economy over the conflict in Ukraine.
In January, the surplus shrank 58.2% year-on-year to $8
billion, squeezing Russia's capital buffers at a time when
Moscow is ramping up budget spending.
Russia's central bank on Monday
estimated
the 2022 economic contraction at 2.5%.
Forecasts for 2023 are varied. The government expects a
decline of 0.8%, while the International Monetary Fund believes
the Russian economy could grow by 0.3% as commodity exports have
proved resilient.
(Reporting by Darya Korsunskaya, Writing by Alexander Marrow
Editing by Gareth Jones)
